Stocks slip in morning trading; oil prices surge
New York • U.S. stocks edged lower Thursday in morning trading after a report showed that retail sales rose less than forecast in May. A separate report showed that more Americans filed for unemployment benefits last week. The price of oil surged amid renewed violence in Iraq.
KEEPING SCORE: The Dow Jones industrial average fell 45 points, or 0.3 percent, to 16,798 as of 11:14 a.m. Eastern time. The Standard & Poor’s 500 was down five points, or 0.3 percent, to 1,938. The Nasdaq slipped 12 points, or 0.3 percent, to 4,319.
NEWS ON THE ECONOMY: U.S. retail sales rose for a fourth straight month in May, but the growth was slightly below economists’ forecasts. The Commerce Department said consumer spending rose 0.3 percent last month, helped by a surge in auto demand, but shy of the 0.4 percent increase that economists expected.
The Labor Department said that weekly applications for unemployment benefits rose 4,000 to a seasonally adjusted 317,000.
NO-GO YOGA: Lululemon Athletica fell $6.82, or 15 percent, to $37.47 after reporting first-quarter profit tumbled 60 percent, stung by a one-time tax adjustment. The Canadian yoga-clothing company also lowered its full-year earnings forecast.
RESTORATION RISE: Restoration Hardware jumped $10.06, or 14 percent, to $80.41 after the furniture and housewares company reported stronger-than-expected results in its fiscal first quarter and raised its outlook for the year, topping Wall Street’s prediction.
POWER SURGE: Energy stocks rose broadly, and were the only sector in the S&P 500 moving higher in late morning trading, as fears rose that insurgent victories in Iraq could disrupt global oil supplies. The price of oil by $1.46, or 1.4 percent, to $105.86.
Diamond Offshore Drilling rose $1.31, or 2.8 percent, to $48.19. Exxon Mobil climbed 64 cents, or 0.8 percent, to $102.60. It was the biggest gainer in the Dow Jones index.
AIRLINES FALL: Higher oil prices helped push down airline stocks sharply. Delta Air Lines fell $2.13, or 5 percent, to $38.58. Southwest Airlines dropped $1.19, or 4.4 percent, to $25.75.
BONDS: The yield on the 10-year Treasury note, which moves in the opposite direction to its price, slipped to 2.62 percent from 2.64 percent on Wednesday.